Posts Tagged ‘business’

Corporations

Tuesday, December 1st, 2009

The business firms that are corporations account for more than 8.5 percent of total business revenue, even though they constitute only 20 percent of all firms. What accounts for the attractiveness of this business structure? From its start. by an Act of the British Parliament in 1862, the corporation, or “joint stock company,” as it is also called, grew in importance for two main reasons. First, although the stockholders of the corporation are the Iegal owners, their liability is limited to the value of their shares of the corporation. If a Corporation owes you money, you cannot directly sue the stockholders. Of course, you can sue the corporation. However, if a corporation goes bankrupt, you and others to whom the firm owes money may simply be out of luck. This limited liability makes it possible for corporations to attract investment funds from a large number of “owners” who do not participate in the day-to-day management of the firm.
Second, ownership can easily be transferred under the corporate structure. The shares, or ownership rights, of an owner who dies can be sold by the heirs to another owner without disrupting the business firm. Because of this, the corporation is an ongoing concern. Similarly, stockholders who become unhappy with the way a corporation is run can hail out merely by selling their stock.

Proprietorship

Thursday, November 26th, 2009

A Proprietorship is a business firm that is owned by a single individual who is fully liable for the debts of the firm. In addition to assuming the responsibilities of ownership, the proprietor often works directly for the firm, providing managerial and other labor services. Many small businesses, including neighborhood grocery stores, barbershops, and farms, are business proprietorships. Proprietorships account for 72 percent of the business firms in the United States. Because most proprietorships are small, however, they account for less than 5 percent of all business revenues.
A partnership consists of two or more persons who are co-owners of a business firm. The partners share risks and responsibilities in an agreed-upon manner. There is no difference between a proprietorship and a partnership in terms of owner liability. In both cases, the owners are fully liable for all business debts incurred by the firm. Many law, medical, and accounting firms are organized along partnership lines. However, this form of business structure accounts for only 8 percent of the total number of firms and 10percent of all business revenues.

LEAST-SQUARES MODEL

Saturday, November 7th, 2009

The least-squares regression model is the same technique that was used in the previous series of posts to find the relationship between two dependent markets, corn and soybeans, or to find how prices moved when driven by known related factors such as supply and demand. Here, the least-squares model will be used to find the relationship between time and price. rather than between two prices, where the price forecast that we are seeking is dependent upon time. The regression model will also be applied in an autoregressive way by recalculating the expected price daily and using the slope of the resulting straight line or curvilinear fit to determine the direction of the trend.
A simple error analysis can be used to evaluate the predictive qualities of this method. Assume that there is a lengthy price series for a market and that we would like to know how many prior days are optimum for predicting the next day’s price. The answer is found by looking at the average error in the predictions. If the number of days in the calculation increases and if the predictive error decreases, the answer is improving; if the error stops decreasing, the accuracy limit has been reached.